Ford Motor’s Indian unit is planning a round-the-clock manufacturing programme at its Chennai plant to meet local as well as overseas demand.

The company plans to produce 1,60,000 units in 2014 by operating the plant in three shifts. The plan is to take it to 2,00,000 cars with vendors’ support.

MUMBAI | HYDERABAD: The Indian car industry is in the middle of a downturn, but Ford Motor’s Indian subsidiary is planning a round the clock manufacturing programme at its Chennai plant to meet surging demand emanating locally as well as from overseas markets for its compact sports utility vehicle EcoSport.

The plant is expected to be operational for 24 hours by the second half of 2014, a first in Ford’s 17 years presence in India. The company plans to produce 1,60,000 units in 2014, and for this the Chennai plant will operate three shifts. The plan is to take it to 2,00,000 cars, if vendors can spruce up supply.

Ford currently makes about 350 units of EcoSport, a day. It has plans to increase the capacity to 450 units per day by June of 2014. By October, the Chennai plant will be producing 600 units of EcoSport per day to meet demand from Europe and Japan, by then the total production will be 750 to 850 units a day of all cars including Figo, Fiesta amongst others.

The move comes at a time when the block closures have become a norm in a declining market. Ford India is working very closely with vendors to ramp up their capacity to meet high demand from the market.

Thus Ford India will join its South Korean rival Hyundai Motor India in Chennai, which is operating its Chennai factory in three shifts.

Ford India spokeswoman said the company continues to evaluate opportunities to remove bottlenecks for reducing the waiting period.

“Given the dynamic and challenging times across the industry and low consumer sentiment, we continue to monitor the situation and will adjust our production to match the demand for our products. We do not comment on specific production volumes,” the spokeswoman added.

After the launch of the EcoSport at an aggressive price, Ford India had garnered massive bookings of over 60,000 units, of which the company has already delivered 35,000 units by January.

While it is good news for the company, its inability to deliver more vehicles for the waiting customers is leading to a lot of frustration for the waiting customers. In fact some of them have been compelled to pay Rs 1 lakh more after paying the booking amount, as Ford India has taken two prices increases in the last 9-12 months.

“I don't think they will be happy, but the responses have been overwhelming, we are looking at how to enhance the capacity. Price changes have been driven due to macro economic environment and we are in touch with each of the customers and there is enough transparency,” assured Tom Chackalackal, ED, Manufacturing, Ford India.

The scenario before the launch of EcoSport was very different. In its 17 years presence, the company's market share was languishing at around 3%. The plant was operating at half the capacity and the company was sitting on accumulated losses of Rs 1,374 crore.

But a lot has changed over the last two years. The engine exports strategy has offered a good revenue stream for the company and the plan to make India the B platform exports hub (compact car platform) is helping Ford on the economies of scale and improve profitability, the depreciating rupee has offered an added boost.

According to Puneet Gupta, associate director, IHS Automotive, a consulting firm the EcoSport could turn out to be the game changer for Ford India and may help the company to move closer to profitability. Gupta thinks Ford India has finally found the right recipe for India.

"If one looks at their future plans, it seems they have found the sweet spot like Hyundai did some years ago. With the EcoSport or future products like the Figo concept, Ford is going to play in the heart of the market. Profitability comes in when you build scale, with the EcoSport and future models, the combined volumes of India and globally will help the company move towards breakeven," added Gupta.

The head of manufacturing at Ford India clarified that though exports demand has remained robust like the domestic market, but the company has not diverted any domestic production to the overseas markets. He said it is a misconception.

“Based on the business plan of India and overseas, investment into manufacturing plant was made, but demand has far exceeded our expectations, the demand for B SUV market has grown more than we thought at the planning stage. Whatever we had committed to the overseas markets or India remains, we are not changing schedules,” explained Chackalackal.